Definition
ROE indicates how much profit a company generates with the money shareholders have invested. A higher ROE indicates more efficient use of equity capital. It's particularly useful for comparing profitability between companies in the same industry.
Formula
ROE = 净利润 / 股东权益 × 100%
Example
If a company has net income of $10 million and shareholders' equity of $50 million, ROE is 20%.
FAQ
What is Return on Equity (ROE)?
A measure of how effectively a company uses shareholders' equity to generate profits.
How do you calculate Return on Equity (ROE)?
A common formula for Return on Equity (ROE) is: ROE = 净利润 / 股东权益 × 100%
Why is Return on Equity (ROE) important?
Return on Equity (ROE) helps investors evaluate profitability and make more informed decisions.